Nigeria achieves 100% local SIM card production

Nigeria has achieved a significant milestone in its telecom industry with the successful production of SIM cards and some components of cell phones through partnerships with the private sector. This achievement speaks volumes about the rapid growth observed in the telecom sub-sector. Gholahan Ologunro, Research Analyst at Cordros Securities, sheds light on the trends shaping the telecoms and cement industries in Nigeria. The telecom industry has seen a positive impact from the pandemic, with increased digital usage and consumption of data due to lockdown measures. This surge in usage translated to record spending, with $15 billion being spent in the industry last year. The pandemic has further reinforced the potential of the telecommunications sector, leading to increased investments in capital expenditure in the medium to long term. Nigeria's demographic remains a key revenue driver for the industry, with a large and youthful population contributing to the growth. Despite the challenges posed by the pandemic, telecom companies like MTN have seen an increase in subscribers, with a growth rate of around 40% in the first half of 2022. The shift towards digital platforms and increased internet usage has paved the way for further investment in network infrastructure to enhance customer experience. Moving forward, there is a need for continued investments in expanding broadband penetration, especially in rural areas, to drive adoption and prepare for technologies like 5G. Industry players are focusing on improving 4G penetration and connectivity in rural communities, with plans to connect thousands of communities to the internet. Collaborations with regulatory bodies and government entities are crucial in reducing charges and streamlining processes to deepen broadband penetration and enhance connectivity. In the cement industry, major players have shown robust performance in the first half of the year. Market leaders like Dangote Cement, Lafarge, and WAPCO have recorded impressive revenue growth, benefiting from increased demand in the private sector. The relaxation of lockdown restrictions has spurred activity in the construction and real estate sectors, leading to a surge in demand for cement. Real estate companies have been able to access financing at lower interest rates, driving investments in the sector. While the expansion in demand for cement may moderate in the second half of the year, the outlook remains positive, with continued strong demand expected from individual consumers and businesses looking to ramp up activities post-pandemic disruptions. The resilience and adaptability of the telecom and cement industries in Nigeria demonstrate the potential for further growth and development, driven by technological advancements and strategic partnerships.